Weekly Market Update May 4, 2020
Generally, when people are discussing the market, they are talking about the stock market or Dow Jones Industrial Averages (DJIA). The DJIA is comprised of 30 large publicly traded companies that represent the US economy. However, there are many other indexes that one can monitor. I’ve chosen to track index ETFs that represent different markets and asset classes as shown in the chart below. It’s not perfect; however, these ETFs can be easily invested and tracked.
Last week the stock markets started off extremely strong as oil prices began to firm and Gilead’s Redesiver drug was shown to shorten the recovery period of severe COVID-19 cases. However, when the new unemployment claims increased by 3.8 million to ~22 million Thursday morning, the markets sold off immediately.
Small Caps had a Great Week!
The iShares Core Small Cap Stock ETF (IJR) was the star performer last week. IJR is designed to track the S&P SmallCap 600 Index (S&P 600). This index is comprised of companies with market caps of $600 million to $2.4 billion. Even with the market sell off on Thursday and Friday this index still topped the chart last week. I wouldn’t get too excited about the great week as it is still down 27.5% this year. Investors are worried that smaller companies will not have access to capital in order to sustain operations.